CompUSA 2007 Annual Report Download - page 89

46
3. RELATED PARTY TRANSACTIONS
The Company leased its headquarters office/warehouse facility from affiliates during 2007, 2006 and 2005 (see Note 10).
Rent expense under the lease aggregated $612,000 in each of those years. The Company believes that these payments were
no higher than would be paid to an unrelated lessor for comparable space.
4. CREDIT FACILITIES
In October 2005, the Company amended and restated its $70,000,000 revolving credit agreement with a group of financial
institutions to increase the amount available to $120,000,000 (which may be increased by up to $30 million, subject to
certain conditions) and to provide for borrowings by the Company’s United States and United Kingdom subsidiaries. The
borrowings are secured by all of the domestic and United Kingdom accounts receivable, the domestic inventories of the
Company, the Company’s United Kingdom headquarters building and the Company’s shares of stock in its domestic and
United Kingdom subsidiaries. The credit facility expires and outstanding borrowings thereunder are due on October 26,
2010. The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts
receivable and up to 40% of qualified inventories. The interest on outstanding advances is payable monthly, at the
Company’s option, at the agent bank’s base rate (at December 31, 2007) plus 0.25% or the bank's daily LIBOR rate (at
December 31, 2007) plus 1.25% to 2.25%. The undrawn availability under the facility may not be less than $15 million until
the last day of any month in which the availability net of outstanding borrowings is at least $70 million. The facility also
calls for a commitment fee payable quarterly in arrears of 0.375% of the average daily unused portions of the facility.
The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not
maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The agreement contains
certain other covenants, including restrictions on capital expenditures and payments of dividends. We were in compliance
with all of the covenants as of December 31, 2007. As of December 31, 2007, eligible collateral under the agreement was
$106.9 million and total availability was $97.0 million. There were outstanding letters of credit of $9.7 million and there
were no outstanding advances.
The Company’s Netherlands subsidiary maintains a €5 million ($7.4 million at the December 31, 2007 exchange rate) credit
facility with a local financial institution. Borrowings under the facility are secured by the subsidiary’s accounts receivable
and are subject to a borrowing base limitation of 85% of the eligible accounts. At December 31, 2007 and, 2006 was €2.6
million and €2.2 million ($3.9 million and $3.0 million) of borrowings outstanding under this line with interest payable at a
rate of 7.05%. The facility expires in September 2008.
The weighted average interest rate on short-term borrowings was 7.5%, 7.8%, and 6.4% in 2007, 2006 and 2005.
5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
December 31,
2007 2006
Payroll and employee benefits $21,850 $17,151
Income taxes payable 2,297 2,327
Freight 10,908 6,106
Deferred revenue 5,704 2,653
Other 41,811 47,451
$82,570 $75,688
6. LONG-TERM DEBT
Long-term debt consists of (in thousands):
December 31,
2007 2006
Capitalized equipment lease obligations $703 $1,031
Less: current portion 449 548
$254 $483
The aggregate maturities of long-term debt outstanding at December 31, 2007 are as follows (in thousands):
2008 2009 2010 2011 2012
Maturities $449 $173 $71 $10 $0